This month, legal management consultant Altman Weil released another in its series of surveys describing where we are (and aren’t) in the legal services industry.
There may be few surprises for those who have been paying attention as nearly everything about the legal profession changes. But I must admit to raised eyebrows as I read down into the Altman release accompanying the link to its “Law Firms in Transition” survey. Here’s what they report. I’ll stop when I get to the surprises:
“The fifth annual Law Firms in Transition Survey shows the evolution in thinking of law firm leaders on legal market trends and how firms are responding to market changes in 2013.”
“‘There have been some dramatic shifts in opinion about the business of law over the last few years, but a lot less tangible action,’ said Altman Weil principal and survey author, Tom Clay. ‘Most firms seem to be operating in a short-term, defensive mode driven by market threats rather than opportunities.’”
“Ninety-six percent of law firm leaders say they believe ‘more price competition’ is a permanent change in the legal market in 2013, according to the survey. Additionally, eight out of ten firm leaders think ‘more non-hourly billing’ is here to stay. In contrast, only 29% of leaders report that their firms have significantly changed their strategic approach to pricing since the recession.”
I’ll pause while you re-read that last sentence. Thinking it a typo, I had more than one go at it.
Back to the press release:
“Law firms’ primary response to pricing pressure appears to be discounts. The survey found that a median of 21% to 30% of legal fees are discounted. In firms with 250 or more lawyers, the median amount of fees discounted goes up to 31% to 40%.”
“‘Discounting is not a strategy,’ said Clay. ‘In fact, it undermines the idea of value and it’s a margin killer.’”
“Ninety-six percent of survey respondents also believe that a ‘focus on improved practice efficiency’ is a permanent change in the legal market. Ninety percent of leaders say there will be ‘more commoditization of legal work;’ and 79% expect ‘more competition from non-traditional service providers.’”
Ready for the one–two punch? Here is is:
“Despite this broad consensus, only 45% of leaders report their firms have made significant changes in strategic approach to efficient legal service delivery.”
That’s called burying the lede, Altman Weil! More than 90 percent of law firm respondents are able to identify serious structural challenges that face their industry. Then, with a steely gaze, only 45 percent have actually done anything to change their approach.
Irony affects all professions, I suppose. But it is striking that in a field in which virtually all participants have sat through a course called “Evidence,” about half of them eschew evidence-based analyses.
Is that unfair? Perhaps the global changes sweeping the law field are somehow exempting half the law firms from the revolution. Please tell me I’m wrong to be surprised at the non-reaction.
In the meantime, “Law Firms in Transition: 2013” is available for download here.Follow @azatty